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[Commentary] © 2000-2001 Philip Hyde, The Timesizing Wire, Box 622 Cambridge MA 02143 USA (617) 623-8080
11/30/2000 1 bankruptcy mentioned -
11/28/2000 2 bankruptcy/liquidation mentions -
- Under fire, Belgian speech[-recognition] software maker files for bankruptcy, by Chris Gaither, NYT, C1.
Facing scrutiny on accounting irregularities and lawsuits from both sides of the Atlantic, Lernout & Hauspie Speech Products NV...filed for Chapter 11 bankruptcy protection in Delaware yesterday. The company's Dictaphone division, a Connecticut-based rival that it bought earlier this year, and L.&H. Holdings USA, a unit formed to own the recently purchased Dragon Systems, also filed for protection. Lernout & Hauspie also said it would seek similar protection in Belgium....
[Pity Dragon sold out to them. Shoulda stayed on its own. Same with Dictaphone. We'll probably eventually get smart enough to ban all takeovers, mergers and acquisitions - they're just too stupid and distracting. "Tin mgmt."]
11/27/2000 1 weekend bankruptcy/failure story -
- Big leasing bankruptcy, Bloomberg via NYT, W1.
The Nippon Shinpan Co., Japan's biggest credit card company, said a subsidiary, Inter-Lease, had filed for liquidation owing...$5.4B to creditors, making it one of the country's largest bankruptcies of the year....
[But nothing compared to the $27B (10/10 below) and $43B (10/22 below) bankruptcies in the Japanese insurance industry.]
- NextWave appeal is denied, by Simon Romero, NYT, C4.
The [US] Supreme Court declined to hear an appeal yesterday from NextWave Telecom in which the company, a bankrupt wireless carrier, was seeking to overturn the forfeiture of nearly 100 licenses for potentially valuable wireless spectrum to the FCC.... "There is still concern over what will happen with air space that's the equivalent of untouched beachfront property," said Todd Harrington, an analyst with Current Analysis....
11/25/2000 1 bankruptcy/failure mention -
- E-commerce report - As online companies crash and burn, some find a way to make a graceful exit, by Bob Tedeschi, NYT, C11.
...On Nov. 15..\..Cliff Sharples, chief executive of Garden.com...announced that Garden.com's retail operations would cease at the beginning of December - leaving time enough for an orderly shutdown.... Among the ever-growing legion of failed e-commerce companies, few are able to plan such a relatively painless death. Analysts said far more have instead chosen to run their companies close to the end of their cash reserves, close the doors and let bankruptcy attorneys sort out the damage.... Mr. Sharples...said, "...We've had amazing employees and business partners, and incredible customers, and that's just not how I wanted to treat them."
[Gee, a CEO who actually respects somebody besides himself.]
With the board's support, Mr. Sharples determined how much it would cost to provide severance pay to the company's 151 employees, and how best to reimburse suppliers and investors.... When the time finally came to close the retail operation, the company announced a four-stage layoff of employees, which is to continue through Dec. 31. Two dozen employees will remain to explore "strategic options" for the company's so-called supply chain software system, which is marketed under the Trellis brand....
[It's interesting that at this "death with dignity" company, one of the employees is actually named George Dignitude, according to the photo caption. And we are not making this up! On the other hand -]
...Living.com, the online furniture retailer that ceased operations in August...is fast becoming the cautionary tale for graceless exits.... Lisa Poulin, the company's bankruptcy trustee...said that she...could not be certain how much the company's [non-furniture] assets were worth. In part, that is because there are no employees left to help demonstrate the value of the assets. The World Wide Web site and its Web address presumably have value, she said, "and I could've gotten a lot more for them than what I'm going to because I don't have people to explain it, or to work it"....
[So employees actually aren't totally disposable?!]
Of course, it is sometimes difficult to determine when to pull the plug on a company, said a former senior executive of the online retailer Boo.com, which shut operations in May, and recently re-opened under new ownership.... But "there are a lot of companies in denial," Mr. Sharples said. "There's always a reason every week to think there's hope."...
11/23/2000 2 bankruptcy/failure mentions -
- Solopoint.com Inc., NYT, B3.
...Los Gatos, Calif., a provider of Internet access and online marketing, said it...would begin to wind down operations, after failing to raise capital or sell the company.
11/22/2000 2 bankruptcies/failures mentioned -
- Grocery chain seeks bankruptcy protection, Bloomberg via NYT, C9.
Big V Supermarkets, which operates 39 ShopRite supermarkets in New York, New Jersey and Pennsylvania [has] filed for bankruptcy-court protection and [will] close 7 stores in New York and Pennsylvania in the next 3 months. The remaining stores will probably be renamed....
Employees at the closed stores will be offered jobs at the surviving stores, but Big V...also expected some jobs would be eliminated, although it did not know how many....
- Grocery chain seeks bankruptcy protection, Bloomberg via NYT, C9.
...C$S Wholesale Grocers...recently [11/14/2000] bought most of the assets of Grand Union, another supermarket chain, out of bankruptcy-court protection....
[Compare additional mention today in "British food retailer buying 12 Grand Union stores," Bridge News via NYT, C3 - "Most of Grand Union's assets are being acquired out of bankruptcy-court protection by C&S Wholesale, Grand Union's main supplier, and many of the stores are being immediately resold."]
11/21/2000 3 bankruptcies/failures mentioned -
- Hit or Miss filed bankruptcy papers, by Chris Reidy, Boston Globe, C8.
Apparel retailer...of Stoughton [Mass.] filed for bankruptcy protection in New Jersey last week as it seeks to reorganize around a new business plan. ...Lacking the size to compete in the [discount] category, Hit or Miss seeks to reposition itself as a more moderately priced version of Talbots or Ann Taylor.... While in Chapter 11, Hit or Miss plans to close at least 28 "nonperforming stores" out of a store base of 199.... Hit or Miss is owned by Kombassan Holding AS, a Turkish conglomerate.
[How appropriate on the eve of Turkey Day.]
- Loewen Group Inc., NYT, C4.
...Burnaby, BC, [Canada,] the 2nd-largest funeral home operator in North America, had its common and preferred shares suspended by the Toronto Stock Exchange for failure to meet the continued listing requirements. The company, which is reorganizing under bankruptcy-court protection, has said it expects all its assets to wind up in the hands of creditors, leaving none to distribute to shareholders.
11/18/2000 1 bankruptcy/failure/closure mentioned -
- Time Warner joint venture in Japan to close, Bloomberg via NYT, C4.
Waek consumer spending in Japan will force the dissolution of the joint venture that operates Time Warner's licensed-character retail stores there. The five stores, stocked with Bugs Bunny and Tasmanian Devil plush toys and other goods, will remain open until summer and then be liquidated, according to Daiei, Time Warner's Japanese partner, which owns 2/3 of the venture....
[Why would the Japanese relate to this American silliness anyway? They've got Godzilla and Mothra and a host of modern cartoon girls with big eyes and tight clothes!]
Daiei also said it would liquidate a casual clothing company and a real estate leasing company it controls...as part of a plan to reduce debt.
- Metal Management seeks Chapter 11 protection, Bloomberg via NYT, C13.
...The largest metal recycling concern in the United States...based in Chicago..\..filed for bankruptcy [yester]day after it missed interest payments to bondholders and announced that it needed to restructure its finances.... Formed in 1996, Metal Mgmt quickly snapped up smaller recyclers in a bid to become the dominant supplier of scrap metal for smaller steel mills known as minimills.... But the Asian economic downturn in the late 1990's led to a steep fall in steel prices and left Metal Mgmt with slumping sales and mounting debt....
[Well it wouldn't have had any debt in the first place if it had built its business instead of trying to just buy it.]
- [Hyundai again.]
Hyundai moves to rescue construction unit, by Samuel Len, NYT, W1.
SEOUL...- The Hyundai Group said [yester]day that it would raise $1.1B by selling real estate and securities to keep its construction unit out of bankruptcy....
11/17/2000 3 bankruptcy/failure/closure mentions -
- ZipLink will close, ending jobs of 80 workers, Bloomberg via NYT, B3.
...A provider of wholesale Internet access [is] shutting down operations immediately and might sell its assets to pay creditors....
11/16/2000 a record 7 bankruptcies/failures/closures mentioned -
- 130 dot-coms close this year, eliminating 8,000 jobs, Bloomberg via Boston Globe, D2.
Dot-com companies are [now] closing at a rate of more than one a day...as the collapse in Internet stocks chokes off the flow of capital keeping start-ups afloat, according to a new report. As many as 130 dot-coms have closed since January, according to San Francisco-based *Webmergers.com, which tracks Internet mergers and acquisitions.
And the pace is accelerating. Through the first half of November, 21 Internet companies closed, almost as many as during all of October, when a record 22 were shuttered...victims of investors' reluctance to pump more money into businesses with little prospect of turning a profit any time soon. "The capital drought has gone on long enough that more and more start-ups are hitting their fume dates," said Brian Horey, partner with Equity Growth Management LLC...and a 12-year veteran of the venture capital industry.... Because many companies raised their last round of funding before stock prices plunged in March, and because start-ups typically raise a year's worth of money at a time, shutdowns could continue into 1Q01, said Bill Burnham [of] Softbank Venture Capital.... "Could we see another 130 in total close by the end of next year? Sure, if market conditions don't change."
[How about 130 more by the end of this year, Bill?!]
..\..3/4 of the shutdowns this year have involved Internet retailers [= b2c or business to consumer]. 26 companies serving the business market [= b2b or business to business] have also closed. More than 1/3 of the shutdowns have come in California [Silicon Valley], with New York [Silicon Alley] next at 11%, the report said. European shutdowns accounted for 8% of the total....
[Ah, now some depression-inducing patterns are really starting to shape up in these three bankruptcy items. Here in this first one, the sexy new technology which has provided the locus of the major financial bubble (and media bubble in terms of ostentatious/media-overcovered employment, income and spending) accelerates into freefall.]
- [In this one, an old rustbelt industry continues its contraction. Timesizing company Nucor Steel becomes a more significant fraction of the survivors.]
WHX says Wheeling-Pittsburgh has filed for Chapter 11, Bloomberg via NYT, C4.
...Its...steel-making unit...filed...in Youngstown, Ohio.... WHX said falling steel prices caused by competition from cheaper imports led to steep losses at Wheeling-Pittsburgh; prices for some steel products have fallen as much as 30% this year. Wheeling-Pittsburgh said that its plants would continue operating, and that Citibank had agreed to give the company a $290m loan to remain open.
- [In this one, a side issue with great disincentivizing potential continues its peripheral blaze. Another such "side issue" relative to America is the deepening tanking of the second-biggest economy, Japan.]
Armstrong Holding may seek bankruptcy, Bloomberg via NYT, C12.
...North America's largest maker of vinyl flooring may seek Chapter 11 bankruptcy-court protection if it cannot find additional funds in the next few months to cover asbestos-related claims. The company faces about 173,000 pending personal-injury claims in asbestos litigation. ...It estimated that its asbestos-related liability through 2006 would be $758.8m-$1.36B.
[See also Armstrong mention below in para.2 of 10/06 #1.]
Asbestos claims have forced at least 6 other building materials makers to seek Chapter 11 protection since the early 1980's....
[And still the big problem goes on - there is no automatic reinvestment of super-excess income and wealth, so it continues its astronomical concentration, far tighter than can possibly be supported by the consumer base and its diminishing level of dynamism, and the increasingly insulated and isolated top brackets shove more and more taxes off their consolidated moneypools onto others' circulation, not considering that the value of their concentrated money depends on stable high levels of circulation. (The mechanism of the imputation of value is exchange: in every transaction or exchange, person A says, B's product or service is worth x units of my greenback symbol and person B says, x units of A's symbol is worth my product or service. This reaffirmation of faith, rippling out and self-reinforcing in trillions of transactions, makes it possible to take a certain amount of the symbol OUT of circulation - i.e., into reduced-frequency+increased-amount circulation - without diminishing its value.) All this overt trouble creates a "bankruptcy incubator" - diminishing dynamism due to a damaged consumer base. People, either downsized themselves or close to someone downsized, stop buying so many non-essentials - like greeting cards for example - especially when those with Internet access can substitute cheaper new technology like email -]
American Greetings to cut dividend and reorganize, Reuters via NYT, C4.
The [Cleveland-based] corporation [is] cutting its dividend in half and...reorganizing itself because of difficult conditions in the greeting card market.... Softness in retail markets and the rising popularity of greetings sent by e-mail were depressing its sales, the company said. American Greetings shares fell...39%....
[We ask once again, where now are all those cheerleading economists who chant, "Technology creates more jobs than it destroys!"? The new jobs, if they can be linked to the technology at all, are ever more deeply in the non-necessity category, and ever more advertising/marketing-intensive. Ergo, more junkmail, spam, telemarketing and door-to-door canvassing as levels of desperation rise, plus of course, more domestic violence and general crime, and more gouging of nature. And the Big Question gets bigger and starts flashing like neon - Which will go critical first, the economy or the environment?]
11/15/2000 1 business failure/closure mentioned -
- Garden.com joins ranks of Web failures - Company to fire staff, sell assets, Bloomberg via Boston Globe, C4.
AUSTIN, Texas - ...The gardening-supplies merchant..\..is going out of business...after running out of money. [It] will fire an undisclosed number of workers and sell off its inventory, site content, and photo library, the company said in a statement distributed by PR Newswire.... Garden.com...has Web sites where gardeners can exchange tips and buy products such as flowers and tools..\.. "Investors have no more tolerance for these companies," said Greg Kyle, president of Pegasus Research International.... "If they cannot demonstrate that they can achieve profitability, we think the rugs will be pulled out from under them"....
[The article above this in the Globe "Smarterkids.com, Earlychildhood.com plan to merge," by Stephanie Stoughton, Boston Globe, C4, has a better general survey of the carnage for some reason -]
...Analysts say the merger reflects the continuing shakeout in the online retail industry that has claimed such players as Toysmart.com, Furniture.com, MotherNature.com and Pets.com. This week, Garden.com and online grocers Streamline.com and ShopLink.com announced their collapses....
[Plus there was Boo.com, NatureCompany.com, DrKoop.com.... Memory fails....]
- CondeNet to close 2 sites, by Saul Hansell, NYT, C4.
The passion has left Swoon.com and the prognosis is grave for Phys.com. CondeNet, the online unit of Advance Publications has decided to close two of its smaller sites: Swoon, which dealt with sex and relationships, and Phys, on women's health. ...The company [wants] to focus on larger sites including Style.com, which is about fashion, and Epicurious, about food. ...Swoon and Phys were said to be less lucrative, with fewer opportunities to sell products related to their content.
- Regal Cinemas considers filing for bankruptcy, Reuters via NYT, C4.
...or other financial restructuring after a series of acquisitions left it with $1.02B in debt.
[Finally filed per "Regal Cinemas, theater owner, to file bankruptcy," Reuters via 9/07/2001 NYT, C4. Oops, no, finally filed per "Regal Cinemas, theater operator, files for bankruptcy," Reuters via 10/13/2001 NYT, C4, which states "Regal Cinemas said yesterday that it became the latest movie operator to file for Chapter 11...." So, not only has merger mania produced loads of layoffs. It's also created mountains of debt, and the outcome of a lot of this corporate debt is bankruptcy. There's a good chance that the most successful economies of the year 3000 AD will simply have outlawed corporate mergers and forced these cowboy executives to succeed the old-fashioned way - by growing their own businesses, not acquiring others' market share.]
The company, which is based in Knoxville, Tenn., was bought in 1998 by Kohlberg Kravis Roberts & Co. and Hicks, Muse, Tate & Furst, and combined with other cinema assets to form the nation's largest theater chain.
Several major competitors, including Carmike Cinemas United Artists Theater Circuit and Edward Theaters Circuit, the parent of General Cinema Theaters, have already filed for bankruptcy-court protection.
[Cheerleading economists who chant "technology creates more jobs than it destroys" conveniently forget the ongoing devastation in the cinema industry that the one-two punch of TV and then videos has wrought. There used to be a little movie theater every couple of blocks in every major city. Not any more.]
- Harrah's unit may seek bankruptcy to reduce debt, Bloomberg via NYT, C4.
The JCC Holding Co., which owns a struggling New Orleans casino and is controlled by Harrah's Entertainment Inc., told state regulators that it might seek bankruptcy-court protection. The company presented a plan to the state Casino Tax Advisory Committee that would reduce its debt to $129.6m from $622.3m, including a proposal to "eliminate current equity holders through a bankruptcy proceeding," the company said in a federal filing. JCC wants Louisiana to reduce what it calls an onerous $100m annual tax on it, and said the casino will bring in about $248m in revenue this year, below the $420m needed to break even.
- Beamscope Canada Inc., NYT, C4.
...Toronto, an electronics distributor, filed for bankruptcy protection after Navarre Corp., of New Hope, Minn., backed out of a previously announced purchase of Beamscope's video entertainment and Laing products businesses.
- Trying to save contractor, Hyundai may sell its home, by Samuel Len, NYT, W1.
SEOUL, North Korea...- In the latest attempt to save its construction unit from bankruptcy, the Hyundai Group said [yester]day that it was ready to do something that is all but taboo in South Korean culture - sell its home as well as its most-prized piece of real estate. The conglomerate said it was turning to its affiliates to sell its headquarters building in downturn Seoul and its in-house trading company....
- [And last but certainly not least, this story from Earth's 2nd-biggest economy (but shrinking fast) -]
Japanese bankruptcies surge, by Stephanie Strom, NYT, W1.
More than 1,700 companies went bankrupt in Japan last month, 22.7% more than in the period a year earlier, Teikoku Databank said. Companies that collapsed in October owed...$79.1B, the highest monthly total since World War II, weighed down by the failures of two huge life insurers. Japan's bankruptcy rate has been climbing, and is set to eclipse the record set in 1998, adding to pressures on othe country's banks.
11/14/2000 1 business failure/closure mentioned -
- ShopLink.com joins ranks of failed grocers - Westwood [Ma.] firm shuts suddenly, by Stephanie Stoughton, Boston Globe, E3.
...yesterday...after failing to attract additional funding.... Following the demises of Streamline.com [see below], Boston-area consumers will be left with only two large Internet grocers: Peapod Inc. and HomeRuns.com.
[And is there even enough business for two?]
11/11/2000 1 bankruptcy mentioned, again -
- Streamline.com delivery service fails, by Judith Berck, NYT, C4.
An Internet company...based in Westwood, Mass..\..with large operations in northern New Jersey and Boston...is calling it quits. The company, which aimed its Web-based grocery and home delivery services at busy suburban families, was founded in 1993 and went public last year. In a last-ditch effort to stay solvent, the company...had sold off operations in Chicago and Washington.
11/10/2000 2 more bankruptcy mentions -
- Receivership for Daewoo, Reuters via NYT, B2.
Two days after being declared bankrupt [see below], Daewoo Motor filed for court receivership, saying normal operations were no longer possible....
11/09/2000 2 bankruptcy mentions, with $5.4B + unspecified debt -
- CareMatrix seeks bankruptcy protection; Gosmans quits, by Jerry Ackerman, Boston Globe, D4.
Nursing home magnate Abe Gosman's financially gasping CareMatrix Corp. was placed on life support yesterday, filing for Chapter 11.... Gosman...resigned as chairman, CEO, and a director of Needham [Ma.]-based CareMatrix. His [two] sons...also quit the board.... CareMatrix listed 47 nursing homes, assisted living centers, and Alzheimer's care facilities that it owned, leased, or managed at the end of last year....
- Daewoo plant idle, by Samuel Len, NYT, W1.
Production stopped at the main Daewoo Motor Co. plant outside Seoul after autoparts suppliers stopped delivering parts not paid for in advance. Creditors forced Daewoo Motor into bankruptcy on Wednesday by cutting off the cash keeping the company afloat, after its labor unions rejected demands for jobcuts. The assets of Daewoo Motor were frozen in the bankruptcy.
[See immediately below.]
11/08/2000 1 bankruptcy-equivalent mentioned, with unspecified debt -
- Daewoo Motor in bankruptcy after creditors balk, by Samuel Len, NYT, W1.
...[and] cut off the money that was keeping [it] afloat.... The move came after Daewoo's union refused to accept layoffs and paycuts that were aimed at making the company an attractive acquisition for General Motors.... Daewoo's creditors, led by the government-run Korea Development Bank, had recently increased their pressure of the union, demanding that workers agree to the layoffs of 3,500 employees and wage cuts.
[There are times when unions should relent, so they don't act as "dumb parasites" and kill their host.]
..\..It also comes amid a recovery in South Korea's economy.... South Korean banks...hold...$50B in bad loans....
[If this is a 'recovery,' who needs a slump?]
Since agreeing to bail out the company last year, South Korean banks...had provided...$1.8B to keep Daewoo operating.... A study in January showed that Daewoo Motor had liabilities of...$15.8B, compared with assets of...$10.4B [net $5.4B in the red], according to the Financial Supervisory Commission, a government agency. Daewoo [can] produce 1.26m vehicles a year, but its plants have been runing at just 60% of capacity....
[A hallmark of depression - over-capacity.]
- [On the other hand...]
Hyundai Engineering [& Construction] reprieve, Bloomberg via NYT, W1.
Creditors of...South Korea's largest contractor agreed to roll over...$603.3m in loans until the end of the year to stave off the threat of bankruptcy yesterday, the [same] day many of its banks decided to let Daewoo Motor fail.
[See also 'Korean construction' story below on 11/01].
11/02/2000 4-in-1 possible bankruptcies mentioned, with unspecified debt -
- MotherNature.com opts to liquidate, by Stephanie Stoughton, Boston Globe, C9.
...[The board of] an online vitamin retailer based in Concord [Ma.] voted to liquidate the company. Shareholders will be asked to approve the liquidation at a special meeting Nov. 30....
11/01/2000 2 bankruptcies mentioned, with $2.2B + unspecified debt -
- Indian lawsuits on school abuse may bankrupt Canada churches, by James Brooke, NYT, front page.
REGINA, Saskatchewan - Lawsuits filied by thousands of former Indian boarding school students in Canada, claiming sexual, physical and "cultural" abuse, threaten to swamp the financial resources of four mainstream Christian churches that ran the schools until 1970.
[Here's what happens when you don't have a statute of limitations. Next native North and South Americans will be suing Spain and the Vatican for Columbus' discovery and ruination of (native) America, and then the Christian churches can get their own back by all suing the Italian government for the cruelty of the Colliseum - and then they can all sue World Jewry for crucifying Christ. Then Israel can sue Iran and Iraq for the Babylonian Captivity and we can enrich World Lawyerdom beyond their wildest dreams.]
"I simply see us going broke," Duncan D. Wallace, the Anglican bishop of Qu'Appelle, which encompasses Regina, said of his diocese.
[You mean they have their operation compartmentalized [like the Titanic?] into dioceses? Clever!]
With resignation, he added, "When you get down to it, all we need is a bottle of wine, a book and a table, and we are in business."
[And face it, Duncan, as long as that book is the Bible, you don't even really need the table. You're dispensing prestigious 'separate reality' and invisible security for which you have, like the witch trials at Salem, only 'spectral evidence.' For the most part, the literacy campaign that really put Christianity on the map is over.]
Settlements could snowball into billions of dollars, devastating the financial resources of Canada's four old-line Christian churches:
Already there are four class-action suits against the churches and the government, which had the churches run schools in distant communities under contract.
- Anglican [= US Episcopalian],
- Roman Catholic [and we all know what high potential they have for this kind of lawsuit in the US],
- Presbyterian [the half that didn't join the United Church in 1925], and
- United Church [an aromatic blend of the Canuckster Methodists, Congregationalists and half the Presbies - by the way, it's the biggest of the Protestant flavors in the Land of the Mounties].
Indian plaintiffs have won all five boarding school abuse trials held in the last two years.... In the [two Province of] Saskatchewan cases, both involving sex abuse and both filed against the government, one plaintiff won $54,000 and the other $114,000. In the [three Province of] British Columbia cases, lawyers for the government and the churches negotiated secrecy over damage awards.
[So the amount of the damage awards was kept secret to avoid accelerating the gold rush, but were the details of the sex abuse also kept secret? Maybe it's getting time to cut the whole mystique and abolish the concept of tax-exempt religions, charities, schools and corporations.]
Auditors for the Anglican Church of Canada predict that legal fees alone will push the church into bankruptcy next year....
10/22/2000 2 bankruptcies mentioned, with $43B + unspecified debt -
- Loewen funeral chain to file a reorganization plan, by Timothy Pritchard, NYT, C4.
...A chain of funeral homes and cemeteries based in Canada that has operated under court protection from creditors for 17 months [expects] to file a reorganization plan with a federal bankruptcy court in the U.S. by Nov. 15. Common shares will probably become worthless, the company's chairman, John Lacey, said..\.. The Loewen Group...'s head office in in British Columbia, but 90% of its business is in the U.S. It owes $2.2B to about 9,000 creditors....
[How in the world can a chain of funeral homes go bust? They have a guaranteed steady stream of clients, based on the death rate.]
- Korean construction concerns in trouble, NYT, C14.
SEOUL...- Dong Ah Construction Industrial, South Korea's No. 1 [don't they mean No. 2? - see below] construction company [will] file for bankruptcy protection. And the top [ie: No. 1] construction company [Hyundai Engineering & Construction] narrowly avoided the same fate [by scraping] together the [bank-imposed] $19.6m to make the payment [on its $4.49B debt yester]day, hours before it would have been declared insolvent.... Korean banks have long been criticized for their leniency toward troubled corporate clients, and are saddled with...$50B in nonperforming loans....
10/20/2000 1 bankruptcy mentioned, with $unspecified debt -
- Another Japanese insurer sets record for bankruptcy - Kyoei's failure shatters 11-day-old mark, by Stephanie Strom, NYT, B2.
TOKYO...- The Kyoei Life Insurance Co. sought court protection [yester]day from creditors ini Japan's biggest bankruptcy [$43B] since World War II, nearly two-thirds larger than the previous record corporate failure [$27B], by another insurer, just 11 days ago [Chiyoda Mutual Life - see below on 10/10]. Kyoei's bankruptcy came after talks with the Prudential Insurance Co. of America about a possible joint venture ended without an agreement....
[Well, as we said 11 days ago about American International Group, Prudential would have to be nuts to wade into this morass.]
Chiyoda's fall after the failure of five other life insurers might have hastened Kyoei's bankruptcy, the company suggested....
[So this is the SEVENTH??!]
The demise of Kyoei and Chiyoda...
[The Yoda would be embarrassed that his Chi ever got mixed up in this!]
...which have been troubled for years, raises pressure on the government to use public money to strengthen the life insurance industry.
[As Will Rogers pointed out, ain't it funny how slow the government is to come to the aid of the poor but how fast they aid the rich.]
Japan's life insurers are finding it difficult to make good on policies sold more than a decade ago, when interest rates were much higher. With rates now hovering near record lows because of Japan's protracted economic weakness, the returns on their investments cannot cover their obligations to policyholders....
[Here's another reason for taking interest-rate control away from central banks (& giving it to regular referendum of the affected public) and quitting the use of interest-rate fiddling to control inflation by valving fear (of job loss) in and out of the economy. The only inflation we have to block is runaway inflation ("hyperinflation") - otherwise we're just being obsessive-compulsive on behalf of the wealthy - who really don't need any more over-incentivation than they've already got in super-abundant superfluity. And we can easily and healthily block runaway inflation by harnessing voluntarism and the charitable instinct within the economy and pitting it against the mercenary money motive. This we do in the employment dimension (and there is an infinite series of further dimensions "behind" that which will need balancing, one after the other, eventually) by drawing a line on the workweek above which employees (and we include management this time) must either quit or work for nothing - well, not exactly nothing - they still get paid but they must "reinvest" their overtime earnings in training or hiring someone else so that their overtime doesn't go on festering forever and likely getting worse, as it does today. "Each one teach one" and "No overtime alone" will be the mottos. And if you work overtime and don't reinvest, the government taxes your overtime compensation and attempts to do the overtime-targetted skill transfer without you, - obviously not an ideal situation - but infinitely better than today, and better than if the government just tossed the dough into 'general revenues'. What would make this easier? A previous phase that slapped an overtime tax on corporations and granted a complete exemption for reinvestment in overtime-targeted training and hiring. Why would any economy want to do this? Think about it. It guides the private sector into cleaning up its own mess - of discarded employees - and when everyone has a much easier time acquiring highly marketable skills and supporting themselves, the taxpayer doesn't have to and we can start dismantling government programs, pork, patronage and bureaucracies by the thousands. When you balance the center of your economy - make it much easier for people to support themselves, as it should be in a highly technologizing age - then you don't have to have government running around ineffectually trying to balance everywhere in the economy BUT the center.
[Parthian/parting shot - seems Japan and the USA each borrowed the wrong thing from the other. We should have borrowed their job security but we took their overwork instead. They should have borrowed our relatively uncorrupted business relations but they took our downsizing. Now they're toast and we're riding gyrating markets, wondering if 10/29/29 is coming up again.]
- Big Boy Restaurant franchiser files for [Chap.11] bankruptcy, AP via NYT, B3.
...The franchiser, the Elias Brothers Corp...based in Warren, Mich., [has] 455 Big Boy Restaurants [in the chain]... The company, which has had cash-flow problems and difficulties with recent expansions, closed 43 Big Boy Restaurants in Pa., W.V., Ohio and Mich. last month.
[The NYT only briefly mentioned 3 of those on 10/04/2000.]
10/18/2000 1 bankruptcy mentioned, with $unspecified debt -
- Student Advantage buy gets judge's OK, by Stephanie Stoughton, Boston Globe, C5.
A federal bankruptcy judge in San Diego approved the sale of CollegeClub.com Inc.'s assets to Student Advantage Inc. of Boston...an online service for college students..\..in a deal estimated at $13.4m...to be completed by Oct. 30.... Student Advantage's...more than 2m..\..card-carrying members get discounts at businesses such as Amtrak, AT&T, restaurants, and both online and offline stores. The company's website also offers a variety of services and information.... CollegeClub.com, based in San Diego, has about 3m student members.
[Isn't this a bit like the 2m tail wagging the 3m dog? How did a 3m-member dog manage to go bankrupt and not a 2m-member tail? Or may we also 'look forward' to the dog's not-too-distant insolvency?]
10/17/2000 2 bankruptcies mentioned, with $unmentioned [or unmentionable?] debt -
- Paul Harris, a clothing retailer, declares bankruptcy, Reuters via NYT, C4.
A women's specialty retailer...plagued by liquidity problems and slower-than-expected sales...filed for Chapter 11 bankruptcy and had arranged to sell most of the assets of its J. Peterman Co. catalog unit [to] yield an immediate cash infusion of $4.3m.... LaSalle Bank National Assoc., a unit of ABN AMRO Holding would provide up to $45m of debtor-in-possession financing. Problems developed after the company cut prices deeply to sell off inventory earlier in the year, hurting Q1 results. The cash squeeze made it difficult for the company to get new merchandise, causing sales in recent months to fall below expectations.
10/14/2000 2 bankruptcies mentioned, with $2.8m actual + $100m potential + $?? debt -
- Weiner's [Stores] closing 44 stores and filing for bankruptcy, AP via NYT, C4.
...A 75-year-old chain of retail clothing stores... in Texas, La., Miss., Ark., and Ala.\..is filing for bankruptcy and closing...44 underperforming stores: 16 of them in La., all 4 of its Little Rock, Ark., outlets and 24 in Texas..\.. The company has about 3,750 people working at 141 stores \of whom\ about 1,100...will be affected by the closings.... The decision was based on cash flow problems and operating losses during the first 6 months of the fiscal year....
[See also our downsizing story today 10/17/2000.]
- Maxwell Shoe buys Joan & David assets, Dow Jones via Boston Globe, D8.
... a "substantial" portion of Joan & David Helpern Inc. and Joan Helpern Designs Inc. for $16.8m cash [in an agreement that] was approved by US Bankruptcy Court Oct. 13..\.. The footwear and apparel maker [had] filed for Chapter 11 bankruptcy protection in March [see our story on 3/14/2000].... The assets include certain inventory, on-order merchandise, leases for Joan & David Helpern's corporate office and all the trademarks of Joan Helpern Designs Inc....
10/12/2000 2 bankruptcy mentions, with 'millions' in debt + even more unspecified -
- Music and movies Web site in bankruptcy-law filing - Scour moves to shelter itself from lawsuits - Another [Internet firm] becomes caught in web of litigation, by Matt Richtel, NYT, B4.
Scour Inc., the Los Angeles company that abets the [allegedly criminal] trading of music and movies over the Internet, has filed for [Chapter 11] bankruptcy-law protection [in L.A.], a move the company said could shelter it from copyright infringement lawsuits [like Napter's] it faces from record companies and movie studios.... It said in court papers that legal claims against it could amount to more than $100m.... Scour listed about $1.2m in assets and just under $4m in debt..\..
[...giving them an actual debt of $2.8m and a potential debt of over $100m.]
Scour joins a growing list of Internet companies in the last several weeks that have filed for bankruptcy protection or closed their doors altogether. Those moves extend a trend in which dozens of dot-com companies laid off employees in September or August, as they continued to struggle to find viable business models and achieve profitability..\.. Last month [Scour] eliminated 52 jobs, 80% of its work force [see 9/04/200]....
- Music and movies Web site in bankruptcy-law filing, by Matt Richtel, NYT, B4.
...Among the latest victims, Chipshot.com, a Sunnyvale, Calif. company that sells golf equipment over the Internet, filed for Chapter 11 protection last week in San Jose, Calif....
10/11/2000 1 bankruptcy mentioned, with $75m debt -
- Drypers Corp., NYT, C4.
...Houston, a maker of disposable diapers, filed for Chapter 11 bankruptcy protection after years of struggling to maintain a foothold in the industry. Drypers said it owed millions to a competitor, the Procter & Gamble Co., Cincinnati, for the right to use patents.
- Movie chain files for Chapter 11 - GC Cos. looks to revamp amid glut of theaters, by Chris Reidy, Boston Globe, C1.
...[General Cinema] Cos. of Chestnut Hill [Mass., unable to] get concessions from its creditors..\..yesterday became the latest movie chain to seek bankruptcy protection.
[Now, who was it that was saying "technology creates more work than it destroys"? Hmmm?]
As its industry struggles with too many theaters...
[Ah, don't they mean "too many VCRs"?]
...and too few customers, GC also announced management changes, with members of the Smith family resigning from most of their posts. GC's troubles could have a [domino effect] of Harcourt General Inc. of Chestnut Hill, the multimedia publisher that spun out GC as a separate company in 1993. Harcourt remains liable as a guarantor for some of the leases on theaters that GC may close....
GC is by no means the first movie-chain company to seek bankruptcy protection.... The list includes...
[And from the companion article we get some of those others -]
- United Artists Theater Co.,
- Edwards Theater Circuit Inc., and
- Silver Cinemas Inc., among others.
Moviegoers unaffected, by Michael Blowen, Boston Globe, C1.
Theater owners are writing another chapter in the history of movies - Chapter 11.
[Stupid headline, great opening sentence!]
- Yesterday, General Cinema [GC] filed for bankruptcy protection.
- Landmark Theatres...filed earlier this year.
- Loews Cineplex Entertainment...is also struggling financially....
- In August, the Showcase Revere was bulldozed....
10/10/2000 1 bankruptcy mentioned, with $27B debt -
- A reorganized Loehmann's emerges from Chapter 11, Dow Jones via NYT, C6.
...A [Bronx-based] discount clothing retailer [has] emerged from...bankrukptcy protection [which it filed for] in July..\..
[Guess neither the NYT nor the Boston Globe mentioned it then, cuz we don't have it below.]
..\..and...completed a deal to get $75m in debt financing....
[Guess that means they had at least $75m in debt.]
Loehmann's...has 44 stores in 17 states.
10/06/2000 2 bankruptcies mentioned, with $3,002.6m debt -
- Japanese insurer files for bankruptcy and sets a record, by Stephanie Strom, NYT, C1.
TOKYO...- The Chiyoda Mutual Life Insurance Co., [founded 96 yrs ago,] one of Japan's largest insurers, filed for bankruptcy protection [yester]day after the government unsuccessfully sought to force other financial institutions to throw it a lifeline. Chiyoda's failure, with nearly $27B in liabilities, made it Japan's biggest postwar bankruptcy.
The company has long been known as perhaps the most financially unsound of Japan's generally unsound life insurers.... But like the collapse of the Sogo department store company nearly 3 mos. ago, the Chiyoda bankruptcy was a reminder of the enormous corporate debts that still infect the Japanese financial system.
Chiyoda had debts totaling ¥2.94Trillion, or $26.95B at current exchange rates, surpassing the record bankruptcy 2 yrs ago of the Japan Leasing Corp., which had debts totaling ¥2.4T. Sogo's debts totaled ¥1.87T.
The problems at Chiyoda represent an extreme version of the broader trouble confronting most of Japan's life insurance companies, which are paying out an average of 4% on insurance policies sold a decade ago...with interest rates now at less than 1%.... Its president, Reiji Yoneyama, said [yester]day that the American International Group Inc...has expressed interest in joining forces to reconstruct the company....
[They'd have to be nuts to wade into this quicksand. Japan's CEOs don't have nearly the same astronomical ratio of pay relative to their lowest-paid employees as American CEOs, but if they've embroiled themselves in this kind of morass, they're way way overpaid and the Great Leak Upward is their biggest background problem and their biggest potential source of relief. Put the centrifuge on all that lethargic, concentrated income and wealth by Timesizing overtime into training and jobs, and Timesizing down overlong Japanese working hours, second only now to big dumb America's. Clearly the bloated pay incentive for Japan's CEOs is backfiring somewhere, so...time to quit paying the "CEO tax" and get all those yen back into the hands of ordinary Japanese who can use it and not just hoard it. In the immortal words of LaFontaine, "L'usage seulement fait la possession" - Usage alone constitutes possession (from the beginning of the fable about L'Avare Qui A Perdu son Tresor = The miser who has lost his treasure).]
10/04/2000 2 bankruptcies mentioned, with $330m + unspecified debt -
- Owens Corning has filed for bankruptcy protection, by Claudia Deutsch, NYT, C2.
...Generally viewed...as well-managed [and] No. 1 in [its] businesses..\..Owens Corning's filing is the end to a 2-year effort to stay out of bankruptcy court. \It\ is the 23rd company to file for reorganization under Chapter 11 of the US Bankruptcy Code because of asbestos litigation.... "I'd settle 10,000 claims in a quarter, and 10,000 more would pop up," said Maura Abeln Smith, Owens Corning's chief counsel. "We just weren't making any headway."
..\..Shares of Owens Corning did not trade yesterday. But Armstrong Holdings, USG, Owens Illinois, Federal-Mogul and several others involved in asbestos litigation lost more than half of their market value..\.. Babcock & Wilcox and Pittsburgh Corning filed for protection earlier this year. And there may be more as plaintiffs' lawyers focus future claims on the dwindling supply of solvent companies.... Most analysts [still] expect Owens Corning's businesses to remain unscathed..\..- in 1998 [it] derived only $135m in sales from products containing asbestos. [However,] it will no longer pay dividends or interest on its nearly $3B in debt....
- Ruthardt seeks liquidation OK, by Bruce Mohl, Boston Globe, C5.
State Insurance Commissioner Linda Ruthardt has asked the [Massachusetts] Supreme Judicial Court to allow her to liquidate New England Financial Insurance Co. of West Springfield. Last month, Ruthardt won court approval to place the company in receivership. [She] decided to move forward with liquidation after learning the company has what is called a "negative surplus" of $2.6m [due to] the loss of access to a $2.75m loan from Springfield Institution for Savings [who Ruthardt says] is wrongly withholding the money....
["Negative surplus", eh? Now there's a euphemism.]
For earlier bankruptcy stories, click on the desired date -
- Steel maker ordered to liquidate, by Wayne Arnold, NYT, W1.
Philippine regulators ordered the liquidation of the country's largest steel maker, the [Philippine] National Steel Corp., after the company's Malaysian owner rejected plans to refinance roughly $330m in overdue debts.... National Steel shut down in November, blaming the Asian financial crisis and a flood of cheaper imports for its debt problems.
[Not to be confused with the (U.S.) National Steel Corp., which took another year&ahalf to bellyup to the top of the fishbowl - see "National Steel seeks bankruptcy protection," Bloomberg via 3/07/2002 NYT, C4.]
- Grand Union files for Chapter 11 for the third time in 6 years, by Leslie Kaufman, NYT, C2.
...The grocery chain...said the filing, in US Bankruptcy Court in Newark, would permit it to conduct business as usual and to pay suppliers and employees while it continues to look for a buyer. Grand Union, which operates 197 stores in Connecticut, New Jersey, New York, Pennsylvania and Vermont [faces] a highly competitive market increasingly dominated by national chains like Wal-Mart.... It filed for bankruptcy protection in 1995 and again in 1998...
[Isn't there a seven-year no-repeat statute, or is that just for personal bankruptcy?]
...but has continued to lose money. For the quarter ended July 22, the company lost $51.7m and posted sales of $658m, compared with $687.3m...a year earlier....
Prior to July 31/99.
For more details, see our laypersons' guide Timesizing, Not Downsizing, which is available online from *Amazon.com and at bookstores in Harvard and Porter Squares, Cambridge, Mass.
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